Unusual Options Activity: Apple (AAPL)

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  • Tech giant Apple (AAPL) can’t seem to catch a break. The company hit an all-time high in September, then had a large pullback. It re-tested that high in late January and shares are pulling back yet again.

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  • But at least one trader sees shares moving higher in the near future. That’s based on the March 26th $141 calls. Over 4,075 of the contracts traded against a prior open interest of 216, a 19-fold rise in volume.

    The trade expires in 36 days. The buyer paid about $1.78 for the contracts. Shares would need to jump about $10 per share higher from their current price near $130 to move in-the-money. Given that shares have traded as high as $145 in the past year, however, the trade isn’t too much of a stretch to make for a compelling buy.

    Action to take: Even if the option didn’t move in-the-money, the trade looks attractive here. It’s an inexpensive trade that could easily deliver mid double-digit profits. And shares of Apple look relatively oversold, having dropped to their 50-day moving average amidst the weakness in the tech space the last few days.

    Overall, this looks like an attractive short-term options trade, and an inexpensive one to boot. As long as traders don’t go looking for massive profits, but rather targeted short-term ones, they should fare just fine.

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